For most of the last two years, the political class has demonstrated proof of these two ignominious distinctions by failing to minimize the damage – if not provide solutions – to a number of fiscal challenges facing the U.S. government. Democrats and Republicans have continued to walk away from the negotiating table with nothing more than a temporary fix and full knowledge that on December 31, 2012, the calculus created by expiring governmental laws and the rude laws of economics, will cause the government to go over the dreaded “fiscal cliff” and take the economy with it.
And now, with the drop-dead date looming, the economic implications of political dysfunction are filling up the windshield of every small business as we race toward the year-end precipice. They know on the other side are multiple tax increases and mandatory budget cuts that will drain cash from consumers and businesses, which many economists predict will lead to another recession. As a consequence, way too many small businesses that barely made it through the Great Recession won’t survive a Double Dip.
With the November 6 election producing little change in the balance of political power, or the players, can we expect the same unleadership dynamic to fix in a matter of days what didn’t get fixed when there was plenty of time? Isn’t that Einstein’s definition of insanity?
We wanted to know what our small business audience thinks about this issue, so recently, in our online poll, we asked, “How do you feel about the ability of President Obama and Congress to avoiding the ‘fiscal cliff?” Here’s what we learned:
Just over a third said they were “Confident” of a fix, with the “Undecided” coming in at 7%. But the big group - 57% - allowed that they had “No confidence” the fiscal cliff would be avoided.
Alas, with precious little time left, it appears that our poll majority may be the accurate one. Meanwhile, small business owners still can’t make informed budget, pricing, and growth decisions for 2013. Here’s some rich irony: If we ran our businesses the way the government runs its affairs, there would be no private sector income to tax.
And yet the political class still wonders why businesses of all sizes aren’t hiring more workers and making more investments.
The 19th century French philosopher de Tocqueville said, “In a democracy, we get the government we deserve.” Rude, but sadly, still true.
This week on The Small Business Advocate Show I talked more about the impact of the fiscal cliff on small businesses with Chuck Kadlec. Chuck is a member of the Economic Advisory Board of the American Principles Project, and former Managing Director of J. & W. Seligman & Co. Inc. and Chief Investment Strategist for Seligman Advisors. He was also Jack Kemp’s economic advisor during his 1988 presidential campaign. Click on one of the links below to listen to Chuck’s fiscal cliff predictions.